MFSA fines tripled last year over 2022

The regulator issued almost half a million worth of fines last year.

The MFSA issues licenses to banks, insurance companies, investment firms and all other financial institutions operating in Malta.

It is responsible for overseeing and enforcing financial regulations on more than 2,000 entities and often issues fines to punish infringements and deter financial crime.

474 investigations

From 474 investigations, the MFSA issued 77 enforcement measures in 2023. These ranged from 60 administrative penalties to five directives, four settlement agreements, three licenses cancelled, two individuals not deemed fit and proper, and one entity that was struck off the register.

Another entity had a competent person appointed to ensure compliance, and another had its license suspended.

CEO Kenneth Farrugia told reporters that enforcement actions, especially fines, must be proportionate, but crucially, dissuasive, to ensure a stable and secure sector going forward, and acknowledged that if the courts slash MFSA fines on appeal, enforcement that is fair and works for everyone must be remodelled with authorities and lawmakers.

"Nearly half of our inspection also had an anti-money laundering and counter-terrorism financing element, and we undertook 44 FIAU-delegated supervisory engagements specifically focused on financial crime compliance," he said.

"These efforts underscore our resolve to combat financial crime and uphold Malta's reputation as a secure, safe and transparent financial hub."

84% of applications for new licences approved

The annual report also notes that last year the authority received 352 licence applications across various sectors, with 84 per cent being approved. The remaining 16 per cent were either withdrawn by the applicants or refused by the MFSA.

The MFSA's supervisory interactions with its licenced entities quadrupled between 2019 and 2023 and increased by 50 per cent last year alone.

These interactions included inspections, meetings, and even "mystery shopping" exercises to assess compliance.

To support the intensifying workload, the MFSA has grown its workforce significantly, according to the report.

It added 107 new recruits last year, bringing the total to nearly 500 full-time equivalent employees. This expanded team underwent extensive training, logging more than 27,000 hours last year.

'Thriving sector grew by 11.8%'

Meanwhile, the "stable and resilient" financial sector continues to thrive, seeing an 11.8 per cent growth last year, generating €1,251 million in gross value added.

The sector grew by nearly 6,500 people between 2019 and 2023, the authority said.

MFSA chair Jesmond Gatt said the industry has seen steady growth, reflecting the strength and stability of Malta's financial ecosystem.

"Locally, the industry has demonstrated remarkable resilience and growth in 2023, outperforming many of our peers in the Euro area," he said.

timesofmalta